Discuss about the International Business for Woodside Petroleum Limited.
The real change in the business world began with the Industrial Revolution of the 19th century as the use of the machines drastically changed the way the various business organizations used to operate at that particular point of time (Weismann, Buscaglia and Peterson 2014). However, many scholars are of the opinion that the major change in the business world came with the use of the use of the process of globalization for the process of business (Weismann, Buscaglia and Peterson 2014). The improvement of the communication as well as the transportation facilities significantly improved the prospects of the various organizations related to the sphere of business (Osipov, Volinsky and Grishin 2014). It is a reflection of this particular fact that the various organizations of the contemporary business world are increasingly turning the concepts of “globalization and the recent technologies as well as innovations” for the process of their business (Osipov, Volinsky and Grishin 2014). Furthermore, it is generally seen that the process of expansion into the other nations of the world entails with itself various factors which the organizations need to take into effective consideration (Raff, Ryan and Stähler 2012). Some of the major ones among these are the strategies which the organization needs to follow in the host nation, the mode or the strategy of entry, the cultural factors, staffing methods and others (Raff, Ryan and Stähler 2012). This essay will discuss about the concept of globalization and its related aspects through the lens of the organization “Woodside Petroleum”.
The organization “Woodside Petroleum Limited” founded in 1954 is a leading organization of the country of Australia and is operational in the field of “oil and gas” industry (Woodside.com.au. 2018). The organization was named after the town of the country of Australia, namely, Woodside, Victoria (Woodside.com.au. 2018). The organization is a “public company listed on the Australian Securities Exchange and has its headquarters in Perth, Western Australia” (Woodside.com.au. 2018). The organization in the initial years of its foundation focused on the “Victoria’s Gippsland Basin” of the country however after the merger with the organization “Shell and Burmah Oil” in the 1990s the organization became operational on a national basis (Woodside.com.au. 2018). The major extraction site of the organization is the “Timor Sea north of Australia” (Woodside.com.au. 2018). However, in the recent times it is seen that the organization is using the oil fields off the Western Coast of the country of Australia, namely, the “Nganhurra FPSO, the Ngujima-Yin FPSO and the Okha FPSO” (Woodside.com.au. 2018). The organization in the recent times following the precepts of globalization has expanded into the various other nations of the world like the United States of America, Canada, “Senegal Republic of Korea, New Zealand, Myanmar, Cameroon, Gabon, Morocco, Ireland” and others (Woodside.com.au. 2018). The major area of focus of the concerned organization is on the “oil and gas” products which it provides to the people from the different parts of the nation (Raff, Ryan and Stähler 2012). The organization in the recent times has emerged as the “largest operator of oil and gas production in Australia and also Australia’s largest independent dedicated oil and gas company” (Woodside.com.au. 2018). The organization under discussion here is the 155th largest organization of the world in terms of the net revenue which it generates on yearly basis and the net revenue generated by the organization for the year 2017 was “$20.9 Billion” (Forbes.com. 2018). Furthermore, the organization currently has more than 3500 employees not only from the nation of Australia but also from the different parts of the world. The below given figure provides a brief overview of the financial details of the organization-
Figure 1: “Financial Statistics of Woodside Petroleum”
Source: “Factset, Bloomberg, S&P Cap IQ; Forbes”
Many scholars are of the opinion that the concepts of international business and globalization are coterminous with each other (Sigler, Searle and Martinus 2017). In a way it can be said that the process o globalization has provided the various organizations with the necessary tools to conduct their business in an effective manner on an international scale (Sigler, Searle and Martinus 2017). Many scholars are opinion that the “advent of globalization has transformed the entire globe into a village wherein the organizations from the different parts of the world can conduct effective business transactions” (Weismann, Buscaglia and Peterson 2014). The organization “Woodside Petroleum Limited” following the concept of globalization in the initial parts of the 21st century expanded into the other nations of the world “not only to find a suitable market for the surplus products manufactured by it but also to enhance the annual profit gained by it” (Weismann, Buscaglia and Peterson 2014). It is a reflection of this fact that the organization “Woodside Petroleum Limited” is currently operational in the major nations of the world like USA, Canada and others (Weismann, Buscaglia and Peterson 2014).
The organization “Woodside Petroleum Limited” expanded into the nation of the USA in the earlier part of the 21st century and has major business interests in this particular nation (Cristini et al. 2017). The nation is the largest economic block of the world and in addition to this it is one of the largest users of the automobile products in the world (Cristini et al. 2017). Therefore, it is obvious that there would be a high demand for petroleum and other products offered by the “oil and gas” industry for the effective performance of these automobiles (Cristini et al. 2017). The precept of the “Uppsala Internationalization Theory” is significant to note in this particular context which states that for the process of internationalization the organizations should “first choose to enter nearby markets with low market commitment” (Kraus et al. 2016). Thus, the entry of the organization into the country of USA can be seen justified on the basis of this particular fact. The nation of USA when seen through the lens of the “Eclectic paradigm” would reveal that it possesses not only location but also international advantages on the score of the trade relations of the nation with the other countries and also its strong economic framework (Kraus et al. 2016). Therefore, it would be apt to say that was one of the primary factors which motivated the organization to expand its business operations in this particular country.
One of the most important issues which the various organizations face during the time of internationalization or the process of expansion into the other nations of the world is to decide upon which strategy they need to follow for the process of entry into the business market of that particular nation (Osipov, Volinsky and Grishin 2014). There are various methods available to the business organizations for the process of entry into the business market of the other countries, namely, collaborations, “merger and acquisition” and others (Osipov, Volinsky and Grishin 2014). Thus, it is seen that the various organizations take the help of diverse kinds of entry strategies for the process of entering into the business market of the various nations of the world (Osipov, Volinsky and Grishin 2014).
The organization “Woodside Petroleum Limited” for the process of its entry into the business market of the nation of USA has followed the method of collaboration (Sigler, Searle and Martinus 2017). The organization in the year 1999 entered into a collaborative deal with the American organization “Sempra Energy” for the establishment of its American business center (Sigler, Searle and Martinus 2017). The American branch of the organization therefore is generally seen as a subsidiary of the main organization “Woodside Petroleum Limited” and “Woodside Energy” (Sigler, Searle and Martinus 2017). The organization under discussion here for its operation in the nation of the USA in addition to the petroleum products which it offers to the customers of the nation of Australia also provides “Neptune oil and Midway gas” which it derives by means of its collaboration with the organization “Sempra Energy” (Sigler, Searle and Martinus 2017). Furthermore, in the recent times the concerned organization is trying to enter into collaboration with the “Korea Gas Corporation (KOGAS)” for the establishment of “Port Arthur LNG liquefaction project in Port Arthur, Texas” (Sigler, Searle and Martinus 2017).
The process of collaboration has provided several kinds of advantages as well as disadvantages to the concerned organization for its operation in the nation of USA (Cristini et al. 2017). The primary benefit which the collaboration with the “Sempra Energy” has provided to the concerned organization is that it had much facilitated the course of the business as well as the entry of the organization into the business market of USA in a significant manner (Cristini et al. 2017). Furthermore, by virtue of the collaboration the organization has been able to utilize the resources of the organization “Sempra Energy” in a significant manner and it is a reflection of this particular fact that the organization in addition to the petroleum products also offers midway gas as well as Neptune oil to the customers (Cristini et al. 2017). Moreover, by means of the collaborative process the organization has also been able to utilize the technological as well as the other resources of “Sempra Energy” in a significant manner to “bring about the overall growth as well as the development of its business process” (Kraus et al. 2016). In addition to these, the organization under discussion here has also been able to utilize the customer base of the organization “Sempra Energy” in the nation of USA for the process of its business in a significant manner (Kraus et al. 2016). The primary disadvantage of the collaborative venture which the organization under discussion here for the process of its entry into the business market of USA has selected is the fact the organization under discussion here has to share its profit with “Sempra Energy” (Kraus et al. 2016). Furthermore, the process of collaboration also limits the flexibility of the organization in a significant manner.
The United Nation has given ten Compact Principles for the conduct of the international business by the various business organizations (Weismann, Buscaglia and Peterson 2014). The ten principles can be broadly classified under four different heading, namely, Human Rights, Labor, Environment and Anti-Corruption (Weismann, Buscaglia and Peterson 2014). Many scholars are of the opinion that these principles are in synchronization with the current needs of the business world (Weismann, Buscaglia and Peterson 2014). It is significant to note that in the recent times the organization has faced some issues on the aspects of environmental issues and therefore it would be apt to say that the organization needs to focus on this particular principle of the United Nation’s dictum (Weismann, Buscaglia and Peterson 2014). Furthermore, one of the most common problems faced by the various organizations conducting international business is the issue of labor management (Weismann, Buscaglia and Peterson 2014). Therefore, it becomes very important for the concerned organization to focus on this particular aspect as well.
To conclude, the process of globalization has impacted the business world in a significant manner. The process of globalization is used by the various organizations to enhance the prospects of their business in a significant manner. However, there are various factors which the organization following the process of internationalization needs to take into consideration like the entry strategy into the business market, the strategies which they need to follow in that particular nation for the process of business and others. Therefore, it becomes very important for the organization to effectively review all the options which are available to them and then take the help of the strategy which suits the needs of their business in the best possible manner. Furthermore, in the present times the organizations also need to take into effective consideration the various principles of the United Nations for the conduct of their business in the international business market. Therefore, it can be said that the process of globalization or internationalization has greatly changed the way the various organization transact their business operations in the present times and it is generally seen that the various organizations take the help of this process to “bring about the overall growth as well as the development of their business organizations”.
References
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